This week on Cake Business Owners Club I showed you tips on how you can have a more profitable cake business.
In case you missed these tips during the week, here is a recap.
We are in this business to make money. Yes we love baking, and yes sometimes it doesn’t feel like work. But in order to survive in this business you need to know how to make money.
Understand who are your customers
You need to know your customers and what they want. Once you have that information, you use all your marketing tactics to target that customer base. If you are selling wedding cakes, you target brides and young couples; you have no business advertising to mothers.
If you are providing cakes for the lower end of the market, then you should be advertising and showing up in secondary schools and universities.
Know how to Price your Cakes
You need to know how to price your cakes. You need to know the cost of ingredients, your labour time and how much profit you want to make.
Don’t let customers bully you to accept a low price, you are a skilled professional and should be paid as such. It is your business so you should be in charge of how much you price your cakes.
If Pricing is an issue for you, register for my Pricing your Cakes Right Video Workshop Series.
You need to find a product that sells well no matter what
You need to find a product in your business that sells well. This has to be something that does not take a lot of time and is easy to make and brings in good money into the business.
For me this was when I started making Swirl Cakes. They take around 2 hours to make including the baking and they are inexpensive to produce too.
The good thing with these types of cakes is that they are ideal for most occasions.
What should you do?
The good thing about this type of method for you as a business is that they are speedy to make, and they sell for a good price.
To give you an example, for a 12” fondant cake with a floral theme I would charge N21,000. It would take me around 6-8 hours to make from scratch and the profit on this cake would be approx N9,000
A box of 12 cupcakes takes under 2 hours from scratch to make, costs no more than N3,000 to produce and sells for N8,000 making you a profit of N4,000
However, I can make 3 Nos. 6 inch Swirl Cakes in the time it takes me to make that one fondant cake, netting me around N4,000 profit per cake.
If you’re savvy with your planning you can do this quicker and for slightly less cost too making your profits even better.
When you are able to do this for your products, your client is happy as you are providing options for them selecting different versions of the cake they want in terms of price.
Know your business’s peak seasons
If you have been in business for a while, you should know what periods when you sell a lot of cakes. Do you sell more cakes during December which are the wedding and Christmas season? If this is so, you should plan for these by either getting more staff and making sure you have all the ingredients you need months before.
Don’t offer too much cake varieties
You providing every type of cakes in every size, style and flavour will not make you rich. If you try and do this, you will be tired always, need a lot of ingredients and tools.
What should you do?
Instead choose a small range of cakes you will offer, for example if you have just a range of 3-4 products, you will have something to suit most clients. This doesn’t have to be restrictive at all but it does help you plan your time better.
For example you can offer boxed Cupcakes for the lower end of your pricing, then celebration cakes (birthday, anniversary, etc) for midrange pricing and, finally wedding cakes for the higher pricing market.
Your cupcakes can start from about N3,000, which are ideal for a small gifts.
Your mid-range celebration cakes can be from N10,000 for a 6 inch cake, these are cakes for bigger celebrations like a party or significant birthday.
Then finally your custom or bespoke range is where your prices aren’t fixed as they are based on the hours that the cake will take you and the skill you will need to devote to it.
By having these distinct tiers of product your client will never be scared off by your pricing and if they would like a custom but haven’t got the budget then you have your celebration range to suit their needs and budget.
Create Good Cakes
The best marketing you can do for your cake business is to make sure that your cakes are tasty and of high quality, that is, using quality ingredients.
Once your cakes are fabulous, you are certain that your customers will keep on returning and will spread the word.
They are a wealth of marketing strategies you can employ, which I regularly give you tips, but the starting point is that you have to have good cakes.
Provide excellent customer service
You need your customers coming back, so you need to give them a good experience all the time.
Deliver on time; answer all their questions in a pleasant way.
If there is a problem, solve it in a timely and with a smile. Customers remember the little things, and this helps you in retaining and keeping your customers.
Rotimicakelady is your personal cake fairy. She is a cake business consultant and Coach.
She runs the Cake Business Owners Club where she helps bakers through Online courses have super profitable and successful cake businesses.
She has a passion for helping women who have a passion for baking, transition from hobby cake makers to successful and profitable cake business owners.
She also help cake business owners who have struggling in their cake business with strategies to enable them get more customers, so you make more money. Rotimicakelady is passionate about Cakes, business and making money.